Fairfield Connecticut Building Expert Directory

Insurer Beware: Failure to Defend Ends with Hefty Verdict

June 01, 2011 — Douglas Reiser, Builders Council Blog

Served with a lawsuit that you turned over to your insurer? Insurer refusing to defend you? Well, find some hope in this news. Washington’s IFCA has the claws to ensure that insurers perform their duties.

Contractors heavily rely on the defense provisions of their Commercial General Liability (CGL) policies. In construction, a legal dispute can easily rear its head when you least expect it. Luckily, Washington registered contractors are required to maintain CGL insurance. That insurance often provides contractors with adequate legal defense in the event that they are sued.

But, what if your insurer turns down the defense request? They might be staring at massive damages. A current Reiser Legal client, Australia Unlimited, Inc., recently won a large verdict against Hartford Insurance, after the insurer unreasonably denied their claim. The firm who represented Australia Unlimited Inc. in that case, Hackett Beecher and Hart, were successful in procuring a $5.43 Million verdict

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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com

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De-escalating The Impact of Price Escalation

August 10, 2021 — Brian C. Padove - ConsensusDocs
What happens when construction material prices abruptly rise by 15%, 35%, 50%? Moreover, what happens to a construction project when such volatility occurs? While there is no definite answer, delays in procuring such materials and associated cost overruns will likely impact the construction project. The last 15 months contractors have had to work through extraordinary construction material price increases, such as a 90% price increase for lumber from April 2020 to April 2021. While there is no statistic quantifying the impact these increases have had on the construction industry, the increases surely have had an influence, whether it has been through lost profits, delays, or damage to contractors’ otherwise strong reputation for timely performance. Considerations Prior To Contract Execution The first way to mitigate price escalation is identifying materials most susceptible to price volatility during the bidding process and then having an open discussion with upstream parties regarding the potential price volatility. Additionally, the bid may also include either (1) an allowance for the materials providing additional funds, if necessary, should the material price increase, or (2) a shortened timeframe in which the bid is open, which would lessen the time in which a price shift may occur. Read the court decision
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Reprinted courtesy of Brian C. Padove, Watt, Tieder, Hoffar & Fitzgerald, LLP
Mr. Padove may be contacted at bpadove@watttieder.com

Biggest U.S. Gas Leak Followed Years of Problems, State Says

June 10, 2019 — Mark Chediak & Edvard Pettersson - Bloomberg
The worst natural gas leak in U.S. history, which broke out at a Sempra Energy storage field near Los Angeles almost four years ago, was caused by corrosion, according to a report commissioned by California regulators. The rupture of a 7-inch (18-centimeter) well casing at Sempra Energy’s Aliso Canyon storage complex was due to “microbial corrosion” brought on by contact with groundwater, an independent analysis conducted by Blade Energy Partners and commissioned by two state agencies found. The report also concluded there had been more than 60 leaks in the field dating back to the 1970s, and Sempra didn’t carry out detailed inspections after they occurred, the California Public Utilities Commission and Department of Conservation said in a joint statement. The company’s Southern California Gas lacked “any form of risk assessment” to manage the integrity of its wells and hadn’t established systematic practices to protect against corrosion and monitor well pressure, the agencies said. Reprinted courtesy of Mark Chediak, Bloomberg and Edvard Pettersson, Bloomberg Read the court decision
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Construction Managers, Are You Exposing Yourselves to Labor Law Liability?

February 22, 2021 — Timothy P. Welch - Hurwitz & Fine, P.C.
When dealing with construction site accidents, who a party is matters. Under Labor Law sections 200, 240(1) and 241(6) owners, contractors, and their agents have a non-delegable duty to provide reasonable and adequate protection to workers from risks inherent at work sites, with a specific emphasis placed on elevation-related hazards. Given the near strict liability nature of Labor Law section 240(1), it is critical to identify whether a party is a proper Labor Law defendant from the get-go. While identifying the owner (and usually the contractor) may be relatively straightforward, identifying “their agents” has proven to be a more complex undertaking. It should be noted that the requirements set forth in the Labor Law are non-delegable from the standpoint of the owner or contractor, however, the duties themselves can be assigned to “agents” of an owner or “agents” of a contractor. When such an assignment occurs, the same non-delegable duty held by the owner or contractor is imposed on the agents as well. Moreover, “once an entity becomes an agent under the Labor Law it cannot escape liability to an injured plaintiff by delegating the work to another entity.[1]” An entity that often skirts the line between being an agent and not, is the Construction Manager. Traditionally, the Construction Manager has been found to be outside the purview of the Labor Law when its scope of work is narrowly focused on scheduling and general coordination of the construction process. However, when a Construction Manager’s scope expands, so does its risk that it may, in fact, become a proper Labor Law defendant. Read the court decision
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Reprinted courtesy of Timothy P. Welch, Hurwitz & Fine, P.C.
Mr. Welch may be contacted at tpw@hurwitzfine.com

Texas Supreme Court Cements Exception to “Eight-Corners” Rule Through Two Recent Rulings

March 06, 2022 — Jeremy S. Macklin - Traub Lieberman Insurance Law Blog
The Texas “eight corners” rule precludes insurers from disclaiming a defense obligation based on facts not alleged in the underlying pleadings. Texas federal and appellate courts have been issuing rulings addressing exceptions to the eight corners rule and recently sought guidance from the Texas Supreme Court on whether Texas law recognizes such exceptions to the “eight corners” rule. The Texas Supreme Court has now spoken on the issue. Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 65 Tex. Sup. Ct. J. 440 (2022). In Monroe, David Jones contracted with 5D Drilling & Pump Services in the summer of 2014 to drill a 3,600-foot commercial irrigation well on his farmland. In 2016, Jones sued 5D for breach of contract and negligence relating to 5D’s drilling operations on Jones’s property. Jones’s pleading was silent as to when the damage flowing from 5D’s alleged acts of misconduct occurred. BITCO and Monroe stipulated that 5D’s drill struck a bore hole during 5D’s drilling operations in or around November 2014. Read the court decision
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Reprinted courtesy of Jeremy S. Macklin, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com

Part of the Whole: Idaho District Court Holds Economic Loss Rule Bars Tort Claims Related to Water Supply Line that was Part of Home Purchase

October 03, 2022 — Gus Sara - The Subrogation Strategist
In Safeco Ins. Co. of Ill. v. LSP Prods. Grp., 2022 U.S. Dist. LEXIS 139566, the United States District Court for the District of Idaho (District Court) considered whether the plaintiff’s tort claims against the manufacturer of an allegedly defective toilet water supply line were barred by the economic loss rule. The defendant filed a motion for summary judgment arguing that, since the supply line was a part of the home when the plaintiff’s insureds purchased it, the plaintiff was barred by the economic loss rule from bringing tort claims against the manufacturer. The District Court granted the defendant’s summary judgment motion, ruling that the supply line was a part of the home, which was the subject of the transaction, at the time it was purchased. Thus, the District Court held that the economic loss rule barred the plaintiff’s tort claims. In 2012, Melissa Norris and Richard Meyers (collectively, the Homeowners) purchased a newly built home in Eagle, Idaho. In 2016, a toilet supply line in one of the bathrooms began leaking, causing water damage to the home as well as to window blinds, an oven and dishwasher. The Homeowners also incurred a loss of rental income. The Homeowners submitted a claim to Safeco Insurance Company (Insurer), their property insurance carrier, who ultimately covered the Homeowners’ losses. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

Construction Company Head Pleads Guilty to Insurance and Tax Fraud

December 20, 2012 — CDJ STAFF
The former head of Orients Construction Company and of Melrose Construciton Company, Herlindo Garcia-Merlos, has entered a guilty plea to charges that the gave false informoation to his insurer, New Jersey Manufacturers Insurance Group, for more than three years in order to lower his workers compensation payments. Mr. Garcia-Merlos was able to underpay by more than $315,000 as a result of this deception. Mr. Garcia-Merlos additionally failed to file tax returns for his companies and underreported his wages on his own tax returns. The State of New Jersey is seeking an eight-year prison term and restitution of more than $400,000. Read the court decision
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Construction Companies Can Be Liable for “Secondary Exposure” of Asbestos to Household Members

October 26, 2017 — Garret Murai - California Construction Law Blog
The history of asbestos regulation in the United States is complicated. Prior to the 1970s, asbestos-containing materials used in construction was widespread. In 1971, when the U.S. Environmental Protection Agency issued an emissions standard for asbestos as part of the Clean Air Act. In 1972, the EPA extended this regulation to an occupational standard and, over the next decade, the EPA together with the U.S. Occupational Safety and Health Administration and the U.S. Consumer Product Safety Commission issued a wide array of regulations aimed at asbestos. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES